Case Study
Initiating coverage report on a West African telecom giant
About the Client
- West Africa based investment and brokerage firm
- A member of West African Regional Stock Exchange (BRVM)
Business Need
- The client wanted to initiate coverage on a leading telecom company based in West Africa, to cater to its foreign clients that wanted to invest in the telecom sector in this region
- It asked RocSearch to forecast the company financials and value the equity, providing target price and investment advice (Buy/Sell/Hold)
Approach and Methodology
- The team adopted a top-down approach, developing an understanding of the trends in the company, sector and the economy
- A detailed revenue model for the company was prepared after identifying the drivers; and then, the major line items were forecasted based on our expectations
- Also, a valuation model was prepared based on a combination of DCF and relative valuation approaches
- Presented our analysis in a comprehensive report, clearly outlining our investment rationale and associated risks
Business Outcomes
- The company in focus performed in line with our major forecasts and appreciated significantly in the subsequent months, vindicating the BUY rating that we had assigned to the stock
